MD
Maryland Senate Bill SB595

Maryland 2024 Regular Session

Maryland Senate Bill SB595 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
44 [Brackets] indicate matter deleted from existing law.
5- Underlining indicates amendments to bill.
6- Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7-amendment.
85 *sb0595*
96
107 SENATE BILL 595
118 J5 4lr1562
12- CF HB 879
9+ CF 4lr2511
1310 By: Senator Hershey
1411 Introduced and read first time: January 26, 2024
1512 Assigned to: Finance
16-Committee Report: Favorable with amendments
17-Senate action: Adopted
18-Read second time: February 27, 2024
1913
20-CHAPTER ______
14+A BILL ENTITLED
2115
2216 AN ACT concerning 1
2317
2418 Health Benefit Plans – Calculation of Cost Sharing Contribution – 2
2519 Requirements and Prohibitions 3
2620
2721 FOR the purpose of requiring administrators, carriers, and pharmacy benefits managers to 4
2822 include certain cost sharing amounts paid by or on behalf of an enrollee or a 5
2923 beneficiary when calculating the enrollee’s or beneficiary’s contribution to a cost 6
30-sharing requirement for certain health care services; requiring administrators, 7
31-carriers, and pharmacy benefits managers to include certain cost sharing amounts 8
32-for certain high deductible health plans after an enrollee or a beneficiary satisfies a 9
33-certain requirement; prohibiting administrators, carriers, and pharmacy benefits 10
34-managers from directly or indirectly setting, altering, implementing, or conditioning 11
35-the terms of certain coverage based on certain information; and generally relating to 12
36-the calculation of cost sharing requirements. 13
24+sharing requirement; requiring administrators, carriers, and pharmacy benefits 7
25+managers to include certain cost sharing amounts for certain high deductible health 8
26+plans after an enrollee or a beneficiary satisfies a certain requirement; prohibiting 9
27+administrators, carriers, and pharmacy benefits managers from directly or indirectly 10
28+setting, altering, implementing, or conditioning the terms of certain coverage based 11
29+on certain information; and generally relating to the calculation of cost sharing 12
30+requirements. 13
3731
3832 BY adding to 14
3933 Article – Insurance 15
4034 Section 15–118.1 and 15–1611.3 16
4135 Annotated Code of Maryland 17
4236 (2017 Replacement Volume and 2023 Supplement) 18
4337
4438 BY repealing and reenacting, with amendments, 19
4539 Article – Insurance 20
4640 Section 15–1601 21
4741 Annotated Code of Maryland 22
48- (2017 Replacement Volume and 2023 Supplement) 23 2 SENATE BILL 595
42+ (2017 Replacement Volume and 2023 Supplement) 23
43+
44+Preamble 24
45+
46+ WHEREAS, Residents of Maryland frequently rely on State–regulated commercial 25
47+health insurance carriers to secure access to the prescription medicines needed to protect 26
48+their health; and 27 2 SENATE BILL 595
4949
5050
5151
52-Preamble 1
52+ WHEREAS, Commercial health insurance designs increasingly require patients to 1
53+bear significant out–of–pocket costs for their prescription medicines; and 2
5354
54- WHEREAS, Residents of Maryland frequently rely on State–regulated commercial 2
55-health insurance carriers to secure access to the prescription medicines needed to protect 3
56-their health; and 4
55+ WHEREAS, High out–of–pocket costs on prescription medicines impact the ability 3
56+of patients to start new and necessary medicines and to stay adherent to their current 4
57+prescriptions; and 5
5758
58- WHEREAS, Commercial health insurance designs increasingly require patients to 5
59-bear significant out–of–pocket costs for their prescription medicines; and 6
59+ WHEREAS, High or unpredictable cost sharing requirements are a main driver of 6
60+elevated patient out–of–pocket costs and allow health insurance carriers to capture 7
61+discounts and price concessions that are intended to benefit patients at the pharmacy 8
62+counter; and 9
6063
61- WHEREAS, High out–of–pocket costs on prescription medicines impact the ability 7
62-of patients to start new and necessary medicines and to stay adherent to their current 8
63-prescriptions; and 9
64+ WHEREAS, Health insurance carriers unfairly increase cost sharing burdens on 10
65+patients by refusing to count third–party assistance toward patients’ cost sharing 11
66+contributions; and 12
6467
65- WHEREAS, High or unpredictable cost sharing requirements are a main driver of 10
66-elevated patient out–of–pocket costs and allow health insurance carriers to capture 11
67-discounts and price concessions that are intended to benefit patients at the pharmacy 12
68-counter; and 13
68+ WHEREAS, The burdens of high or unpredictable cost sharing requirements are 13
69+borne disproportionately by patients with chronic or debilitating conditions; and 14
6970
70- WHEREAS, Health insurance carriers unfairly increase cost sharing burdens on 14
71-patients by refusing to count third–party assistance toward patients’ cost sharing 15
72-contributions; and 16
71+ WHEREAS, Restrictions are needed on the ability of health insurance carriers and 15
72+their intermediaries to use unfair cost sharing designs to retain rebates and price 16
73+concessions that instead should be directly passed on to patients as cost savings; and 17
7374
74- WHEREAS, The burdens of high or unpredictable cost sharing requirements are 17
75-borne disproportionately by patients with chronic or debilitating conditions; and 18
75+ WHEREAS, Patients need equitable and accessible health coverage that does not 18
76+impose unfair cost sharing burdens on them; now, therefore, 19
7677
77- WHEREAS, Restrictions are needed on the ability of health insurance carriers and 19
78-their intermediaries to use unfair cost sharing designs to retain rebates and price 20
79-concessions that instead should be directly passed on to patients as cost savings; and 21
78+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
79+That the Laws of Maryland read as follows: 21
8080
81- WHEREAS, Patients need equitable and accessible health coverage that does not 22
82-impose unfair cost sharing burdens on them; now, therefore, 23
81+Article – Insurance 22
8382
84- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 24
85-That the Laws of Maryland read as follows: 25
83+15–118.1. 23
8684
87-Article – Insurance 26
85+ (A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 24
86+INDICATED. 25
8887
89-15–118.1. 27
88+ (2) “ADMINISTRATOR ” HAS THE MEANING STA TED IN § 8–301 OF THIS 26
89+ARTICLE. 27
9090
91- (A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS 28
92-INDICATED. 29
93-
94- (2) “ADMINISTRATOR ” HAS THE MEANING STAT ED IN § 8–301 OF THIS 30
95-ARTICLE. 31
91+ (3) “CARRIER” MEANS AN ENTITY SUBJ ECT TO THE JURISDICT ION OF 28
92+THE COMMISSIONER THAT CONTRACTS , OR OFFERS TO CONTRAC T, TO PROVIDE, 29
93+DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY OF THE COSTS OF HEALTH 30
94+CARE SERVICES UNDER A HEALTH BENEFIT PLAN IN THE STATE. 31
9695 SENATE BILL 595 3
9796
9897
99- (3) “CARRIER” MEANS AN ENTITY SUBJ ECT TO THE JURISDICT ION OF 1
100-THE COMMISSIONER THAT CON TRACTS, OR OFFERS TO CONTRAC T, TO PROVIDE, 2
101-DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY OF THE COSTS OF HEALTH 3
102-CARE SERVICES UNDER A HEALTH BENEFIT PLA N IN THE STATE. 4
98+ (4) “COST SHARING ” MEANS ANY COPAYMENT , COINSURANCE , 1
99+DEDUCTIBLE, OR OTHER SIMILAR CHA RGE REQUIRED OF AN E NROLLEE FOR A 2
100+HEALTH CARE SERVICE COVERED BY A HEALTH BENEFIT PLAN, INCLUDING A 3
101+PRESCRIPTION DRUG , AND PAID BY OR ON BE HALF OF THE ENROLLEE. 4
103102
104- (4) “COST SHARING ” MEANS ANY COPAYMENT , COINSURANCE , 5
105-DEDUCTIBLE, OR OTHER SIMILAR CHA RGE REQUIRED OF AN E NROLLEE FOR A 6
106-HEALTH CARE SERVICE COVERED BY A HEALTH BENEFIT PLAN , INCLUDING A 7
107-PRESCRIPTION DRUG , AND PAID BY OR ON BE HALF OF THE ENROLLEE . 8
103+ (5) “ENROLLEE” MEANS AN INDIVIDUAL ENTITLED TO PAYMENT FOR 5
104+HEALTH CARE SERVICES FROM AN ADMINISTRATOR OR A CARRIER. 6
108105
109- (5) “ENROLLEE” MEANS AN INDIVIDUAL ENTITLED TO PAYMENT FOR 9
110-HEALTH CARE SERVICES FROM AN ADMINISTRATO R OR A CARRIER. 10
106+ (6) “HEALTH BENEFIT PLAN ” MEANS A POLICY , A CONTRACT, A 7
107+CERTIFICATION , OR AN AGREEMENT OFFERED OR ISSUED BY AN ADMINIS TRATOR 8
108+OR A CARRIER TO PROV IDE, DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY 9
109+OF THE COSTS OF HEAL TH CARE SERVICES . 10
111110
112- (6) “HEALTH BENEFIT PLAN” MEANS A POLICY , A CONTRACT , A 11
113-CERTIFICATION , OR AN AGREEMENT OFFE RED OR ISSUED BY AN ADMINISTRATOR 12
114-OR A CARRIER TO PROV IDE, DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY 13
115-OF THE COSTS OF HEAL TH CARE SERVICES . 14
111+ (7) “HEALTH CARE SERVICE” MEANS AN ITEM OR SER VICE PROVIDED 11
112+TO AN INDIVIDUAL FOR THE PURPOSE OF PREVE NTING, ALLEVIATING, CURING, OR 12
113+HEALING HUMAN ILLNES S, INJURY, OR PHYSICAL DISABILI TY. 13
116114
117- (7) “HEALTH CARE SERVICE ” MEANS AN ITEM OR SERVICE PROVI DED 15
118-TO AN INDIVIDUAL FOR THE PURPOSE OF PREVE NTING, ALLEVIATING, CURING, OR 16
119-HEALING HUMAN ILLNES S, INJURY, OR PHYSICAL DISABILI TY. 17
115+ (B) THE ANNUAL LIMITATION ON COST SHARING PROV IDED FOR UNDER 42 14
116+U.S.C. § 18022(C)(1) SHALL APPLY TO ALL H EALTH CARE SERVICES COVERED 15
117+UNDER A HEALTH BENEFIT PLAN OFFERED OR ISSU ED BY AN ADMINISTRATOR OR A 16
118+CARRIER IN THE STATE. 17
120119
121- (B) THE ANNUAL LIMITATION ON COST SHARING PROV IDED FOR UNDER 42 18
122-U.S.C. § 18022(C)(1) SHALL APPLY TO ALL HEALTH CARE SERVICES COVERED 19
123-UNDER A HEALTH BENEF IT PLAN OFFERED OR I SSUED BY AN ADMINIST RATOR OR A 20
124-CARRIER IN THE STATE. 21
120+ (C) (1) SUBJECT TO PARAGRAPHS (2) AND (3) OF THIS SUBSECTION , 18
121+WHEN CALCULATING AN ENROLLEE’S CONTRIBUTION TO AN APPLICABLE COST 19
122+SHARING REQUIREMENT , AN ADMINISTRATOR OR A CARRIER SHALL INCLUD E COST 20
123+SHARING AMOUNTS PAID BY THE ENROLLEE OR O N BEHALF OF THE ENRO LLEE BY 21
124+ANOTHER PERSON . 22
125125
126- (C) (1) FOR A PRESCRIPTION DR UG OR BIOLOGICAL PRO DUCT COVERED 22
127-BY A HEALTH BENEFIT PLAN, THIS SUBSECTION APPL IES ONLY WITH RESPEC T TO A 23
128-PRESCRIPTION DRUG OR BIOLOGICAL PRODUCT : 24
126+ (2) IF THE APPLICATION OF THE R EQUIREMENT UNDER PAR AGRAPH 23
127+(1) OF THIS SUBSECTION WOULD RESULT IN HEALTH SAVINGS ACCOU NT 24
128+INELIGIBILITY UNDER § 223 OF THE INTERNAL REVENUE CODE, THE REQUIREMENT 25
129+SHALL APPLY TO HEALTH SAVINGS ACCOU NT–QUALIFIED HIGH DEDUC TIBLE 26
130+HEALTH PLANS WITH RESPECT TO THE DEDUCTIBLE OF THE PL AN AFTER THE 27
131+ENROLLEE SATISFIES THE MINIMU M DEDUCTIBLE UNDER § 223 OF THE INTERNAL 28
132+REVENUE CODE. 29
129133
130- (I) THAT DOES NOT HAVE A N AB–RATED GENERIC EQUIVA LENT 25
131-OR AN INTERCHANGEABL E BIOLOGICAL PRODUCT PREFERRED UNDER THE 26
132-FORMULARY OF THE HEA LTH BENEFIT PLAN ; OR 27
133-
134- (II) 1. THAT HAS AN AB–RATED GENERIC EQUIVA LENT OR 28
135-AN INTERCHANGEABLE B IOLOGICAL PRODUCT PR EFERRED UNDER THE 29
136-FORMULARY OF THE HEA LTH BENEFIT PLAN ; AND 30
137-
138- 2. TO WHICH THE ENROLLE E HAS OBTAINED ACCES S 31
139-THROUGH A PRIOR AUTH ORIZATION, STEP THERAPY PROTOCO L, OR EXCEPTION OR 32
140-APPEAL PROCESS OF TH E ADMINISTR ATOR OR CARRIER . 33
134+ (3) FOR ITEMS OR SERVICES THAT ARE PREVENTIVE CARE IN 30
135+ACCORDANCE WITH § 223(C)(2)(C) OF THE INTERNAL REVENUE CODE, THE 31
136+REQUIREMENTS OF THIS SUBSECTION SHALL APP LY REGARDLESS OF WHETHER THE 32
137+ENROLLEE SATISFIES T HE MINIMUM DEDUCTIBL E UNDER § 223 OF THE INTERNAL 33
138+REVENUE CODE. 34
141139 4 SENATE BILL 595
142140
143141
144- (2) SUBJECT TO PARAGRAPHS (2) AND (3) (3) AND (4) OF THIS 1
145-SUBSECTION, WHEN CALCULATING AN ENROLLEE’S CONTRIBUTION TO AN 2
146-APPLICABLE COST SHAR ING REQUIREMENT , AN ADMINISTRATOR OR A CARRIER 3
147-SHALL INCLUDE COST S HARING AMOUNTS PAID BY THE ENROLLEE OR O N BEHALF 4
148-OF THE ENROLLEE BY A NOTHER PERSON . 5
142+ (D) AN ADMINISTRATOR OR A CARRIER MAY NOT DIRECTLY OR INDIRECTLY 1
143+SET, ALTER, IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN 2
144+COVERAGE, INCLUDING THE BENEFIT DESIGN , BASED IN WHOLE OR IN PART ON 3
145+INFORMATION ABOUT TH E AVAILABILITY OR AM OUNT OF FINANCIAL OR PRODUCT 4
146+ASSISTANCE AVAILABLE FOR A PRESCRIPTION D RUG. 5
149147
150- (2) (3) IF THE APPLICATION OF T HE REQUIREMENT UNDER 6
151-PARAGRAPH (1) (2) OF THIS SUBSECTION W OULD RESULT IN HEALT H SAVINGS 7
152-ACCOUNT INELIGIBILIT Y UNDER § 223 OF THE INTERNAL REVENUE CODE, THE 8
153-REQUIREMENT SHALL AP PLY TO HEALTH SAVING S ACCOUNT–QUALIFIED HIGH 9
154-DEDUCTIBLE HEA LTH PLANS WITH RESPE CT TO THE DEDUCTIBLE OF THE PLAN 10
155-AFTER THE ENROLLEE S ATISFIES THE MINIMUM DEDUCTIBLE UNDER § 223 OF THE 11
156-INTERNAL REVENUE CODE. 12
148+ (E) THE COMMISSIONER MAY ADOP T REGULATIONS TO CARRY OUT THIS 6
149+SECTION. 7
157150
158- (3) (4) FOR ITEMS OR SERVICES THAT ARE PREVENTIVE CARE IN 13
159-ACCORDANCE WITH § 223(C)(2)(C) OF THE INTERNAL REVENUE CODE, THE 14
160-REQUIREMENTS OF THIS SUBSECTION SHALL APP LY REGARDLESS OF WHE THER THE 15
161-ENROLLEE SATISFIES T HE MINIMUM DEDUCTIBL E UNDER § 223 OF THE INTERNAL 16
162-REVENUE CODE. 17
151+15–1601. 8
163152
164- (D) AN ADMINISTRATOR OR A CARRIER MAY NOT DIRE CTLY OR INDIRECTLY 18
165-SET, ALTER, IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN 19
166-COVERAGE, INCLUDING THE BENEFI T DESIGN, BASED IN WHOLE OR IN PART ON 20
167-INFORMATION ABOUT TH E AVAILABILITY OR AM OUNT OF FINANCIAL OR PRODUCT 21
168-ASSISTANCE AVAILABLE FOR A PRESCRIPTION D RUG OR BIOLOGICAL PRODUC T. 22
153+ (a) In this subtitle the following words have the meanings indicated. 9
169154
170- (E) THE COMMISSIONER MAY ADOP T REGULATIONS TO CAR RY OUT THIS 23
171-SECTION. 24
155+ (b) “Agent” means a pharmacy, a pharmacist, a mail order pharmacy, or a 10
156+nonresident pharmacy acting on behalf or at the direction of a pharmacy benefits manager. 11
172157
173-15–1601. 25
158+ (c) “Beneficiary” means an individual who receives prescription drug coverage or 12
159+benefits from a purchaser. 13
174160
175- (a) In this subtitle the following words have the meanings indicated. 26
161+ (d) (1) “Carrier” means the State Employee and Retiree Health and Welfare 14
162+Benefits Program, an insurer, a nonprofit health service plan, [or] a health maintenance 15
163+organization, OR ANY OTHER ENTITY S UBJECT TO THE JURISDICTION OF THE 16
164+COMMISSIONER that: 17
176165
177- (b) “Agent” means a pharmacy, a pharmacist, a mail order pharmacy, or a 27
178-nonresident pharmacy acting on behalf or at the direction of a pharmacy benefits manager. 28
166+ (i) provides prescription drug coverage or benefits in the State; and 18
179167
180- (c) “Beneficiary” means an individual who receives prescription drug coverage or 29
181-benefits from a purchaser. 30
168+ (ii) enters into an agreement with a pharmacy benefits manager for 19
169+the provision of pharmacy benefits management services. 20
182170
183- (d) (1) “Carrier” means the State Employee and Retiree Health and Welfare 31
184-Benefits Program, an insurer, a nonprofit health service plan, [or] a health maintenance 32
185-organization, OR ANY OTHER ENTITY SUBJECT TO THE JURIS DICTION OF THE 33
186-COMMISSIONER that: 34
171+ (2) “Carrier” does not include a person that provides prescription drug 21
172+coverage or benefits through plans subject to ERISA and does not provide prescription drug 22
173+coverage or benefits through insurance, unless the person is a multiple employer welfare 23
174+arrangement as defined in § 514(b)(6)(a)(ii) of ERISA. 24
187175
188- (i) provides prescription drug coverage or benefits in the State; and 35 SENATE BILL 595 5
176+ (e) “Compensation program” means a program, policy, or process through which 25
177+sources and pricing information are used by a pharmacy benefits manager to determine the 26
178+terms of payment as stated in a participating pharmacy contract. 27
179+
180+ (f) “Contracted pharmacy” means a pharmacy that participates in the network of 28
181+a pharmacy benefits manager through a contract with: 29
182+
183+ (1) the pharmacy benefits manager; or 30
184+
185+ (2) a pharmacy services administration organization or a group purchasing 31
186+organization. 32
187+ SENATE BILL 595 5
188+
189+
190+ (G) “COST SHARING ” MEANS ANY COPAYMENT , COINSURANCE , 1
191+DEDUCTIBLE, OR OTHER SIMILAR CHA RGE REQUIRED OF A BENEFICIARY FOR A 2
192+HEALTH CARE SERVICE COVERED BY A HEALTH BENEFIT PLAN, INCLUDING A 3
193+PRESCRIPTION DRUG , AND PAID BY OR ON BE HALF OF THE BENEFICIARY. 4
194+
195+ [(g)] (H) “ERISA” has the meaning stated in § 8–301 of this article. 5
196+
197+ [(h)] (I) “Formulary” means a list of prescription drugs used by a purchaser. 6
198+
199+ (J) “HEALTH BENEFIT PLAN ” MEANS A POLICY , A CONTRACT, A 7
200+CERTIFICATION , OR AN AGREEMENT OFFERED OR ISSUED BY AN ADMINIS TRATOR 8
201+OR A CARRIER TO PROV IDE, DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY 9
202+PORTION OF THE COST OF HEALTH CARE SERVI CES. 10
203+
204+ (K) “HEALTH CARE SERVICE ” MEANS AN ITEM OR SER VICE PROVIDED TO AN 11
205+INDIVIDUAL FOR THE P URPOSE OF PREVENTING , ALLEVIATING, CURING, OR 12
206+HEALING HUMAN ILLNES S, INJURY, OR PHYSICAL DISABILI TY. 13
207+
208+ [(i)] (L) (1) “Manufacturer payments” means any compensation or 14
209+remuneration a pharmacy benefits manager receives from or on behalf of a pharmaceutical 15
210+manufacturer. 16
211+
212+ (2) “Manufacturer payments” includes: 17
213+
214+ (i) payments received in accordance with agreements with 18
215+pharmaceutical manufacturers for formulary placement and, if applicable, drug utilization; 19
216+
217+ (ii) rebates, regardless of how categorized; 20
218+
219+ (iii) market share incentives; 21
220+
221+ (iv) commissions; 22
222+
223+ (v) fees under products and services agreements; 23
224+
225+ (vi) any fees received for the sale of utilization data to a 24
226+pharmaceutical manufacturer; and 25
227+
228+ (vii) administrative or management fees. 26
229+
230+ (3) “Manufacturer payments” does not include purchase discounts based on 27
231+invoiced purchase terms. 28
232+
233+ [(j)] (M) “Nonprofit health maintenance organization” has the meaning stated 29
234+in § 6–121(a) of this article. 30
235+ 6 SENATE BILL 595
236+
237+
238+ [(k)] (N) “Nonresident pharmacy” has the meaning stated in § 12–403 of the 1
239+Health Occupations Article. 2
240+
241+ [(l)] (O) “Participating pharmacy contract” means a contract filed with the 3
242+Commissioner in accordance with § 15–1628(b) of this subtitle. 4
243+
244+ [(m)] (P) “Pharmacist” has the meaning stated in § 12–101 of the Health 5
245+Occupations Article. 6
246+
247+ [(n)] (Q) “Pharmacy” has the meaning stated in § 12 –101 of the Health 7
248+Occupations Article. 8
249+
250+ [(o)] (R) “Pharmacy and therapeutics committee” means a committee 9
251+established by a pharmacy benefits manager to: 10
252+
253+ (1) objectively appraise and evaluate prescription drugs; and 11
254+
255+ (2) make recommendations to a purchaser regarding the selection of drugs 12
256+for the purchaser’s formulary. 13
257+
258+ [(p)] (S) (1) “Pharmacy benefits management services” means: 14
259+
260+ (i) the [procurement of prescription drugs at a negotiated rate for 15
261+dispensation within the State to beneficiaries] NEGOTIATION OF THE P RICE OF 16
262+PRESCRIPTION DRUGS , INCLUDING THE NEGOTI ATING AND CONTRACTIN G FOR 17
263+DIRECT AND INDIRECT REBATES, DISCOUNTS, OR OTHER PRICE CONCE SSIONS; 18
264+
265+ (ii) the administration or management of prescription drug coverage 19
266+provided by a purchaser for beneficiaries; [and] 20
267+
268+ (iii) any of the following services provided with regard to the 21
269+administration of prescription drug coverage: 22
270+
271+ 1. mail service pharmacy; 23
272+
273+ 2. claims processing, retail network management, and 24
274+payment of claims to pharmacies for prescription drugs dispensed to beneficiaries; 25
275+
276+ 3. clinical formulary development and management services; 26
277+
278+ 4. rebate contracting and administration; 27
279+
280+ 5. patient compliance, therapeutic intervention, and generic 28
281+substitution programs; [or] 29
282+
283+ 6. disease management programs; 30 SENATE BILL 595 7
189284
190285
191286
192- (ii) enters into an agreement with a pharmacy benefits manager for 1
193-the provision of pharmacy benefits management services. 2
287+ 7. DRUG UTILIZATION REV IEW; OR 1
194288
195- (2) “Carrier” does not include a person that provides prescription drug 3
196-coverage or benefits through plans subject to ERISA and does not provide prescription drug 4
197-coverage or benefits through insurance, unless the person is a multiple employer welfare 5
198-arrangement as defined in § 514(b)(6)(a)(ii) of ERISA. 6
289+ 8. ADJUDICATION OF APPE ALS OR GRIEVANCES 2
290+RELATED TO A PRESCRI PTION DRUG BENEFIT ; 3
199291
200- (e) “Compensation program” means a program, policy, or process through which 7
201-sources and pricing information are used by a pharmacy benefits manager to determine the 8
202-terms of payment as stated in a participating pharmacy contract. 9
292+ (IV) THE PERFORMANCE OF ADM INISTRATIVE, MANAGERIAL , 4
293+CLINICAL, PRICING, FINANCIAL, REIMBURSEMENT , DATA ADMINISTRATION OR 5
294+REPORTING, OR BILLING SERVICES ; OR 6
203295
204- (f) “Contracted pharmacy” means a pharmacy that participates in the network of 10
205-a pharmacy benefits manager through a contract with: 11
296+ (V) OTHER SERVICES DEFIN ED BY THE COMMISSIONER IN 7
297+REGULATION . 8
206298
207- (1) the pharmacy benefits manager; or 12
299+ (2) “Pharmacy benefits management services” does not include any service 9
300+provided by a nonprofit health maintenance organization that operates as a group model, 10
301+provided that the service: 11
208302
209- (2) a pharmacy services administration organization or a group purchasing 13
210-organization. 14
303+ (i) is provided solely to a member of the nonprofit health 12
304+maintenance organization; and 13
211305
212- (G) “COST SHARING ” MEANS ANY COPAYMENT , COINSURANCE , 15
213-DEDUCTIBLE, OR OTHER SIMILAR CHA RGE REQUIRED OF A BE NEFICIARY FOR A 16
214-HEALTH CARE SERVICE COVERED BY A HEALTH BENEFIT PLAN , INCLUDING A 17
215-PRESCRIPTION DRUG , AND PAID BY OR ON BE HALF OF THE BENEFICI ARY. 18
306+ (ii) is furnished through the internal pharmacy operations of the 14
307+nonprofit health maintenance organization. 15
216308
217- [(g)] (H) “ERISA” has the meaning stated in § 8–301 of this article. 19
309+ [(q)] (T) “Pharmacy benefits manager” means: 16
218310
219- [(h)] (I) “Formulary” means a list of prescription drugs used by a purchaser. 20
311+ (1) a person that [performs], IN ACCORDANCE WITH A WRITTEN 17
312+AGREEMENT WITH A PUR CHASER, EITHER DIRECTLY OR INDIRECT LY, PROVIDES 18
313+ONE OR MORE pharmacy benefits management services; OR 19
220314
221- (J) “HEALTH BENEFIT PLAN ” MEANS A POLICY , A CONTRACT , A 21
222-CERTIFICATION , OR AN AGREEMENT OFFE RED OR ISSUED BY AN ADMINISTRATOR 22
223-OR A CARRIER TO PROVIDE , DELIVER, ARRANGE FOR , PAY FOR, OR REIMBURSE ANY 23
224-PORTION OF THE COST OF HEALTH CARE SERVI CES. 24
315+ (2) AN AGENT OR OTHER PR OXY OR REPRESENTATIV E, CONTRACTOR , 20
316+INTERMEDIARY , AFFILIATE, SUBSIDIARY, OR RELATED ENTITY OF A PERSON THAT 21
317+FACILITATES, PROVIDES, DIRECTS, OR OVERSEES THE PROVISI ON OF PHARMACY 22
318+BENEFITS MANAGEMENT SERVICES. 23
225319
226- (K) “HEALTH CARE SERVICE ” MEANS AN ITEM OR SER VICE PROVIDED TO AN 25
227-INDIVIDUAL FOR THE P URPOSE OF PREVENTING , ALLEVIATING, CURING, OR 26
228-HEALING HUM AN ILLNESS, INJURY, OR PHYSICAL DISABILI TY. 27
320+ [(r)] (U) “Proprietary information” means: 24
229321
230- [(i)] (L) (1) “Manufacturer payments” means any compensation or 28
231-remuneration a pharmacy benefits manager receives from or on behalf of a pharmaceutical 29
232-manufacturer. 30
322+ (1) a trade secret; 25
233323
234- (2) “Manufacturer payments” includes: 31
235- 6 SENATE BILL 595
324+ (2) confidential commercial information; or 26
325+
326+ (3) confidential financial information. 27
327+
328+ [(s)] (V) “Purchaser” means a person that offers a plan or program in the State, 28
329+including the State Employee and Retiree Health and Welfare Benefits Program, that: 29
330+ 8 SENATE BILL 595
236331
237332
238- (i) payments received in accordance with agreements with 1
239-pharmaceutical manufacturers for formulary placement and, if applicable, drug utilization; 2
333+ (1) provides prescription drug coverage or benefits in the State; and 1
240334
241- (ii) rebates, regardless of how categorized; 3
335+ (2) enters into an agreement with a pharmacy benefits manager for the 2
336+provision of pharmacy benefits management services. 3
242337
243- (iii) market share incentives; 4
338+ [(t)] (W) “Rebate sharing contract” means a contract between a pharmacy 4
339+benefits manager and a purchaser under which the pharmacy benefits manager agrees to 5
340+share manufacturer payments with the purchaser. 6
244341
245- (iv) commissions; 5
342+ [(u)] (X) (1) “Therapeutic interchange” means any change from one 7
343+prescription drug to another. 8
246344
247- (v) fees under products and services agreements; 6
345+ (2) “Therapeutic interchange” does not include: 9
248346
249- (vi) any fees received for the sale of utilization data to a 7
250-pharmaceutical manufacturer; and 8
347+ (i) a change initiated pursuant to a drug utilization review; 10
251348
252- (vii) administrative or management fees. 9
349+ (ii) a change initiated for patient safety reasons; 11
253350
254- (3) “Manufacturer payments” does not include purchase discounts based on 10
255-invoiced purchase terms. 11
351+ (iii) a change required due to market unavailability of the currently 12
352+prescribed drug; 13
256353
257- [(j)] (M) “Nonprofit health maintenance organization” has the meaning stated 12
258-in § 6–121(a) of this article. 13
354+ (iv) a change from a brand name drug to a generic drug in accordance 14
355+with § 12–504 of the Health Occupations Article; or 15
259356
260- [(k)] (N) “Nonresident pharmacy” has the meaning stated in § 12–403 of the 14
261-Health Occupations Article. 15
357+ (v) a change required for coverage reasons because the originally 16
358+prescribed drug is not covered by the beneficiary’s formulary or plan. 17
262359
263- [(l)] (O) “Participating pharmacy contract” means a contract filed with the 16
264-Commissioner in accordance with § 15–1628(b) of this subtitle. 17
360+ [(v)] (Y) “Therapeutic interchange solicitation” means any communication by a 18
361+pharmacy benefits manager for the purpose of requesting a therapeutic interchange. 19
265362
266- [(m)] (P) “Pharmacist” has the meaning stated in § 12–101 of the Health 18
267-Occupations Article. 19
363+ [(w)] (Z) “Trade secret” has the meaning stated in § 11–1201 of the Commercial 20
364+Law Article. 21
268365
269- [(n)] (Q) “Pharmacy” has the meaning stated in § 12 –101 of the Health 20
270-Occupations Article. 21
366+15–1611.3. 22
271367
272- [(o)] (R) “Pharmacy and therapeutics committee” means a committee 22
273-established by a pharmacy benefits manager to: 23
368+ (A) THIS SECTION APPLIES ONLY TO A PHARMACY B ENEFITS MANAGER 23
369+THAT PROVIDES PHARMA CY BENEFITS MANAGEMENT SERVICES ON BEHALF OF A 24
370+CARRIER. 25
274371
275- (1) objectively appraise and evaluate prescription drugs; and 24
276-
277- (2) make recommendations to a purchaser regarding the selection of drugs 25
278-for the purchaser’s formulary. 26
279-
280- [(p)] (S) (1) “Pharmacy benefits management services” means: 27
281-
282- (i) the [procurement of prescription drugs at a negotiated rate for 28
283-dispensation within the State to beneficiaries] NEGOTIATION OF THE P RICE OF 29 SENATE BILL 595 7
284-
285-
286-PRESCRIPTION DRUGS , INCLUDING THE NEGOTI ATING AND CONTRACTIN G FOR 1
287-DIRECT AND INDIRECT REBATES, DISCOUNTS, OR OTHER PRICE CONCE SSIONS; 2
288-
289- (ii) the administration or management of prescription drug coverage 3
290-provided by a purchaser for beneficiaries; [and] 4
291-
292- (iii) any of the following services provided with regard to the 5
293-administration of prescription drug coverage: 6
294-
295- 1. mail service pharmacy; 7
296-
297- 2. claims processing, retail network management, and 8
298-payment of claims to pharmacies for prescription drugs dispensed to beneficiaries; 9
299-
300- 3. clinical formulary development and management services; 10
301-
302- 4. rebate contracting and administration; 11
303-
304- 5. patient compliance, therapeutic intervention, and generic 12
305-substitution programs; [or] 13
306-
307- 6. disease management programs; 14
308-
309- 7. DRUG UTILIZATION REV IEW; OR 15
310-
311- 8. ADJUDICATION OF APPE ALS OR GRIEVANCES 16
312-RELATED TO A PRESCRI PTION DRUG BENEFIT ; 17
313-
314- (IV) THE PERFORMANCE OF A DMINISTRATIVE , MANAGERIAL , 18
315-CLINICAL, PRICING, FINANCIAL, REIMBURSEMENT , DATA ADMINISTRATION OR 19
316-REPORTING, OR BILLING SERVICES ; OR 20
317-
318- (V) OTHER SERVICES DEFIN ED BY THE COMMISSIONER IN 21
319-REGULATION . 22
320-
321- (2) “Pharmacy benefits management services” does not include any service 23
322-provided by a nonprofit health maintenance organization that operates as a group model, 24
323-provided that the service: 25
324-
325- (i) is provided solely to a member of the nonprofit health 26
326-maintenance organization; and 27
327-
328- (ii) is furnished through the internal pharmacy operations of the 28
329-nonprofit health maintenance organization. 29
330-
331- [(q)] (T) “Pharmacy benefits manager” means: 30 8 SENATE BILL 595
332-
333-
334-
335- (1) a person that [performs], IN ACCORDANCE WITH A WRITTEN 1
336-AGREEMENT WITH A PUR CHASER, EITHER DIRECTL Y OR INDIRECTLY , PROVIDES 2
337-ONE OR MORE pharmacy benefits management services; OR 3
338-
339- (2) AN AGENT OR OTHER PR OXY OR REPRESENTATIV E, CONTRACTOR , 4
340-INTERMEDIARY , AFFILIATE, SUBSIDIARY, OR RELATED ENTITY OF A PERSON THAT 5
341-FACILITATES, PROVIDES, DIRECTS, OR OVERSEE S THE PROVISION OF P HARMACY 6
342-BENEFITS MANAGEMENT SERVICES. 7
343-
344- [(r)] (U) “Proprietary information” means: 8
345-
346- (1) a trade secret; 9
347-
348- (2) confidential commercial information; or 10
349-
350- (3) confidential financial information. 11
351-
352- [(s)] (V) “Purchaser” means a person that offers a plan or program in the State, 12
353-including the State Employee and Retiree Health and Welfare Benefits Program, that: 13
354-
355- (1) provides prescription drug coverage or benefits in the State; and 14
356-
357- (2) enters into an agreement with a pharmacy benefits manager for the 15
358-provision of pharmacy benefits management services. 16
359-
360- [(t)] (W) “Rebate sharing contract” means a contract between a pharmacy 17
361-benefits manager and a purchaser under which the pharmacy benefits manager agrees to 18
362-share manufacturer payments with the purchaser. 19
363-
364- [(u)] (X) (1) “Therapeutic interchange” means any change from one 20
365-prescription drug to another. 21
366-
367- (2) “Therapeutic interchange” does not include: 22
368-
369- (i) a change initiated pursuant to a drug utilization review; 23
370-
371- (ii) a change initiated for patient safety reasons; 24
372-
373- (iii) a change required due to market unavailability of the currently 25
374-prescribed drug; 26
375-
376- (iv) a change from a brand name drug to a generic drug in accordance 27
377-with § 12–504 of the Health Occupations Article; or 28
372+ (B) (1) SUBJECT TO PARAGRAPH S (2) AND (3) OF THIS SUBSECTION , 26
373+WHEN CALCULATING A BENEFICIARY’S CONTRIBUTION TO AN A PPLICABLE COST 27
374+SHARING REQUIREMENT , A PHARMACY BENEFITS MANAGER SHALL INCLUD E COST 28
375+SHARING AMOU NTS PAID BY THE BENEFICIARY ON BEHALF OF THE BENEFICIARY BY 29
376+ANOTHER PERSON . 30
378377 SENATE BILL 595 9
379378
380379
381- (v) a change required for coverage reasons because the originally 1
382-prescribed drug is not covered by the beneficiary’s formulary or plan. 2
380+ (2) IF THE APPLICATION OF THE REQUIREMENT UNDER PARAGRAPH 1
381+(1) OF THIS SUBSECTION WOULD RESULT IN HEALTH SAVINGS ACCOU NT 2
382+INELIGIBILITY UNDER § 223 OF THE INTERNAL REVENUE CODE, THE REQUIREMENT 3
383+SHALL APPLY TO HEALTH SAVINGS ACCOUNT–QUALIFIED HIGH DEDUCTIBLE 4
384+HEALTH PLANS WITH RESPECT TO THE DEDUCTIBLE OF THE PLAN AFTER THE 5
385+BENEFICIARY SATISFIES THE MINIMUM DEDUCTIB LE UNDER § 223 OF THE 6
386+INTERNAL REVENUE CODE. 7
383387
384- [(v)] (Y) “Therapeutic interchange solicitation” means any communication by a 3
385-pharmacy benefits manager for the purpose of requesting a therapeutic interchange. 4
388+ (3) FOR ITEMS OR SERVICES TH AT ARE PREVENTIVE CA RE IN 8
389+ACCORDANCE WITH § 223(C)(2)(C) OF THE INTERNAL REVENUE CODE, THE 9
390+REQUIREMENTS OF THIS SUBSECTION SHALL APPLY REGARDLE SS OF WHETHER THE 10
391+BENEFICIARY SATISFIES THE MINIMUM DEDUCTIBLE U NDER § 223 OF THE 11
392+INTERNAL REVENUE CODE. 12
386393
387- [(w)] (Z) “Trade secret” has the meaning stated in § 11–1201 of the Commercial 5
388-Law Article. 6
394+ (C) A PHARMACY BENEFITS MA NAGER MAY NOT DIRECTLY OR INDI RECTLY 13
395+SET, ALTER, IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN 14
396+COVERAGE, INCLUDING THE BENEFI T DESIGN, BASED IN WHOLE OR IN PART ON 15
397+INFORMATION ABOUT TH E AVAILABILITY OR AM OUNT OF FINANCIAL OR PRODUCT 16
398+ASSISTANCE AVAILABLE FOR A PRESCRIPTION D RUG. 17
389399
390-15–1611.3. 7
400+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 18
401+policies, contracts, and health plans issued, delivered, or renewed in the State on or after 19
402+January 1, 2025. 20
391403
392- (A) THIS SECTION APPLIES ONLY TO A PHARMACY B ENEFITS MANAGER 8
393-THAT PROVIDES PHARMA CY BENEFITS MANAGEME NT SERVICES ON BEHALF OF A 9
394-CARRIER. 10
395-
396- (B) (1) FOR A PRESCRIPTION DR UG OR BIOLOGICAL PRO DUCT COVERED 11
397-BY A HEALTH BENEFIT PLAN, THIS SUBSECTION APPL IES ONLY WITH RESPEC T TO A 12
398-PRESCRIPTION DRUG OR BIOLOGICAL PRODUCT : 13
399-
400- (I) THAT DOES NOT HAVE A N AB–RATED GENERIC EQUIVALENT 14
401-OR AN INTERCHANGEABL E BIOLOGICAL PRODUCT PREFERRED UNDER THE 15
402-FORMULARY OF THE HEA LTH BENEFIT PLAN ; OR 16
403-
404- (II) 1. THAT HAS AN AB–RATED GENERIC EQUIVA LENT OR 17
405-AN INTERCHANGEABLE B IOLOGICAL PRODUCT PR EFERRED UNDER THE 18
406-FORMULARY OF THE HEA LTH BENEFIT PLAN ; AND 19
407-
408- 2. TO WHICH THE BENEFIC IARY HAS OBTAINED AC CESS 20
409-THROUGH A PRIOR AUTH ORIZATION, STEP THERAPY PROTOCO L, OR EXCEPTION OR 21
410-APPEAL PROCESS OF TH E CARRIER. 22
411-
412- (2) SUBJECT TO PARAGRAPHS (2) AND (3) (3) AND (4) OF THIS 23
413-SUBSECTION, WHEN CALCULATING A B ENEFICIARY’S CONTRIBUTION TO AN 24
414-APPLICABLE COST SHAR ING REQUIREMENT , A PHARMACY BENEFITS MANAGER 25
415-SHALL INCLUDE COST S HARING AMOUNTS PAID BY THE BENEFICIARY O N BEHALF OF 26
416-THE BENEFICIARY BY A NOTHER PERSON . 27
417-
418- (2) (3) IF THE APPLICATION OF THE REQUIREMENT UNDE R 28
419-PARAGRAPH (1) (2) OF THIS SUBSECTION W OULD RESULT IN HEALT H SAVINGS 29
420-ACCOUNT INELIGIBILIT Y UNDER § 223 OF THE INTERNAL REVENUE CODE, THE 30
421-REQUIREMENT SHALL AP PLY TO HEALTH SAVING S ACCOUNT–QUALIFIED HIGH 31
422-DEDUCTIBLE HEALTH PLANS WITH RE SPECT TO THE DEDUCTI BLE OF THE PLAN 32
423-AFTER THE BENEFICIAR Y SATISFIES THE MINI MUM DEDUCTIBLE UNDER § 223 OF 33
424-THE INTERNAL REVENUE CODE. 34 10 SENATE BILL 595
425-
426-
427-
428- (3) (4) FOR ITEMS OR SERVICES THAT ARE PREVENTIVE CARE IN 1
429-ACCORDANCE WITH § 223(C)(2)(C) OF THE INTERNAL REVENUE CODE, THE 2
430-REQUIREMENTS OF THIS SUBSECTION SHALL APP LY REGARDLESS OF WHE THER THE 3
431-BENEFICIARY SATISFIE S THE MINIMUM DEDUCT IBLE UNDER § 223 OF THE 4
432-INTERNAL REVENUE CODE. 5
433-
434- (C) A PHARMACY BENEFITS MA NAGER MAY NOT DIRECT LY OR INDIRECTLY 6
435-SET, ALTER, IMPLEMENT, OR CONDITION THE TER MS OF HEALTH BENEFIT PLAN 7
436-COVERAGE, INCLUDING THE BENEFI T DESIGN, BASED IN WHOLE OR IN PART ON 8
437-INFORMATION ABOUT TH E AVAILABILITY OR AM OUNT OF FINANCIAL OR PRODUCT 9
438-ASSISTANCE AVAILABLE FOR A PRESCRIPTION D RUG OR BIOLOGICAL PRODUCT. 10
439-
440- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 11
441-policies, contracts, and health plans issued, delivered, or renewed in the State on or after 12
442-January 1, 2025. 13
443-
444- SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall tak e effect 14
445-January 1, 2025. 15
446-
447-
448-
449-
450-Approved:
451-________________________________________________________________________________
452- Governor.
453-________________________________________________________________________________
454- President of the Senate.
455-________________________________________________________________________________
456- Speaker of the House of Delegates.
404+ SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
405+January 1, 2025. 22